A Guide to the Cyprus Holding Company Regime

Why set up a holding company? In essence, holding companies are set up as an effective means of consolidating ownership of operating subsidiaries. Deciding where to set up a holding company is not always a tax driven exercise, but usually, a business entrepreneur will seek the most tax effective means of consolidating ownership of his or her operating subsidiaries.

As aptly stated by Lord Tomlin in IRC v Duke of Westminster, “every man is entitled if he can to order his affairs so that the tax attaching under the appropriate Act is less than it otherwise would be”. Indeed, no taxpayer is obliged to pay more tax than he can be compelled to, so a lot of structuring is often resorted to in order to minimize the incidence of taxation. The revenues flowing from such investment are considerable so it is no wonder that there is increasing competition over which jurisdiction can offer the best holding regime.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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